DoE issues power procurement circular

In a move to foster competition and transparency and meet market demand at minimum cost, the Department of Energy (DoE) released a circular introducing the competitive selection process (CSP) for distribution utilities (DUs) wanting to secure power supply.

Under Department Circular DC2018-02-0003, DUs shall comply with the standard procurement procedures and documents in securing electricity for its customers.

All power supply agreements (PSAs) shall be procured through the CSP, with DoE the one to issue a certificate of exemption for conducting the process, provided that any DU-owned power-generation project is financed through grants or donations, and the negotiated procurement of emergency power supply should not exceed one year.

The DoE can also waive the process if any mandated government-controlled company supplies power to off-grid areas until a new provider comes in, and the Power Sector Assets and Liabilities Management Corp. (PSALM) supplies electricity through bilateral deals for power from undisposed generating assets and independent power producer contracts.

A DU, through its board of directors, shall create a five-member, third-party bids and awards committee (TPBAC) to oversee the CSP. Three will come from the DU; the rest, from customers not directly connected to the utility.

If there is no such committee, the DU may tap a third-party auctioneer (TPA) for the process that shall compose of private individuals or entity.

To ensure transparency and effectiveness, the TPBAC or TPA shall invite people to only observe, and not participate and vote in the CSP.

The Energy Regulatory Commission (ERC) can impose fines and/or penalties on entities that do not implement this policy. It shall also review whether the parties complied with CSP requirements.

These fines and penalties are stated in Section 46 of Republic Act 9136, or the Electric Power Industry Reform Act of 2001 (Epira).

Reference:

Lagareon, J. S. (February 10, 2018). DoE issues power procurement circular. Manila Times. Retrieved from http://www.manilatimes.net/doe-issues-power-procurement-circular/379300/

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